Announcing American International Group’s
(AIG) 2011 results, its president and CEO Robert H Benmosche sent
out a clear message that AIG has put its troubled past behind it
and is again a force to be reckoned with in the insurance
industry.
Benmosche had good reason to be happy with
AIG’s results which reflected net income of $17.8bn, up from $7.8bn
in 2010. “In 2011, we began to prosper once again,” said
Benmosche.
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“Two years ago, sceptics – and even some
supporters – thought it inconceivable that we would be in a
position to post our second consecutive annual profit.” He added
that among AIG’s other achievements in 2011 was repayment of the
Federal Reserve Bank of New York’s credit facility and the raising
of $8.7bn through a public equity offer.
“As we look to 2012 and beyond, we anticipate
we’ll continue to be competitive in all areas of our core insurance
businesses,” said Benmosche. “We have a high degree of confidence
in our future earnings prospects.” Of AIG’s three core insurance,
its retirement product-focused life unit, SunAmerica, was the
biggest profit generator, recording taxed operating income of
$3.26bn. This was, however, down from $4bn in 2010. General
insurance unit, Chartis, recorded taxed operating income of
$1.12bn, a swing from a $1.07bn loss in 2010.
Also providing a big boost in 2011 was income
from AIG’s stakes in insurers MetLife and its formerly wholly-owned
Asian unit, AIA Group, which rose from a combined $27m in 2010 to
$1.13bn.
Following shortly after the release of its
results, AIG announced the sale of 1.72bn shares in Hong Kong Stock
Exchange-listed AIA Group for a total consideration of about $6bn.
The sale reduced AIG’s stake in AIA group from 32.6% to 18.6%. AIG
is restricted from selling any of its remaining ordinary shares in
AIA Group until 4 September 2012.
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By GlobalDataAIG has earmarked proceeds from the sale of
AIA Group shares to further reduce its debt of some $50bn to the US
Treasury. At its peak, government assistance to AIG stood at some
$182bn.
